AUDITING and Assurance Individual Assignment Contents Introduction

AUDITING and Assurance
Individual Assignment

Contents
Introduction................................................................................................................ 3
Reasons for Collapse of ABC Learning Center............................................................4
Competition Increasing........................................................................................... 4
Lack of proper Financial Auditing............................................................................4
Personal Transfer of Funds...................................................................................... 5
Government Policies Updates.................................................................................. 5
Audit Standards on the Public Demand...................................................................5
Audit Standards Key Audit Matters............................................................................. 6
Importance of the key audit matter............................................................................6
Concert of the key audit matters............................................................................6
Spot the key audit matter....................................................................................... 7
Usefulness of ASA701.............................................................................................. 7
Significance of the Key Audit Matter.......................................................................7
Special Interest Matters.......................................................................................... 7
Enhance Communication......................................................................................... 8
General Assumption................................................................................................ 8
Conclusion.................................................................................................................. 9
References............................................................................................................... 10

Introduction
In the year 2008 Australia face tremendous economic crises. In which a major company of day care of
children collapsed. A child care and old and disable training center was introduced by a company name
ABC Learning Center. It was not one of its kinds but still rose with a tremendous speed. The speed was
so much that even the management could not control the success of the company. Within five years of
working the ABC Learning Center owned 20% of the market share of the child day care centers in the
whole of the Australia. The ABC learning center had almost 800 centers. The growth of the center was
very well visible on the stock market. The price of the share rose up to 300% in the span of five years of
working in Australia. Approx. 50 million profit was earned by ABC Learning Center in the year 2004-
2005 financial Year. To rise is easy but to maintain the same height is very tough. Same happened with
the ABC Leaning Center. As the management could not control the rise of the company they could not
even hold the fall down of the company. There were various reasons